International Development (Reporting and Transparency) Bill - Standing Committee B

[Mr. Jimmy Hood in the Chair]

International Development (Reporting and Transparency) Bill

Jimmy Hood: Members who wish to do so may remove their jackets. I remind the Committee that there is a money resolution in connection with the Bill, copies of which are available in the room. I understand that the Committee hopes to conclude its consideration of the Bill at the first sitting. If that should not prove possible, I shall invite Mr. Clarke to move a sittings motion specifying the date and time of our next sitting. I do not intend to call starred amendments.

Clause 1 - Annual reports: general

Tom Clarke: I beg to move amendment No. 14, in page 1, line 4, leave out from ‘Parliament’ to end of line 5 and insert
‘each year a report about international aid pursuant to the provisions of this Act (an “annual report”).’.

Jimmy Hood: With this it will be convenient to discuss the following amendments:
No. 15, in page 1, line 6, leave out from beginning to end of line 16 on page 2 and insert—
‘()In this Act, “relevant period” means—
(a)a period of 12 months ending with 31st December, in the case of information which is normally produced by reference to calendar years,
(b)in any other case, a period of 12 months ending with 31st March.’.
No. 16, in page 2, line 18, leave out
‘the end of the relevant period’
and insert ‘31st March each year’.

Tom Clarke: It is an enormous pleasure, Mr. Hood, to sit under your chairmanship. I welcome you to the Chair, and I am sure we all look forward to working under your distinguished chairmanship.
The Committee will be aware that on Second Reading I was asked to tighten up the Bill’s provisions. On reflection, the changes outlined in the amendments seem not only sensible and practical but necessary. To that end I have endeavoured to take such advice on board. Above all, these amendments and others to which I intend to speak later this morning are based on numerous discussions with the Department for International Development, with sponsors and supporters of the Bill and with the Clerks, and I am grateful to them for all their advice and support. I am especially grateful to my hon. Friend the Minister. Throughout those discussions, I have genuinely attempted, in the spirit of the United Nations  millennium development co-ordinator, to make it a cross-party Bill, and to take on board as far as possible the points made on Second Reading by Members of all parties.
I believe that considerable progress and improvements will be made as a result of the amendments, largely because I have had access to such a wide cross-section of suggestions. In amendment No. 14 and the others in this group, I seek to outline the importance of the annual report and to spell out, in the detail that I believe is required, the technical nature of the reports. To that end, the amendments are for the purposes of simplification; they will shorten the clause to a summary clause, and the detailed provisions will be set out in subsequent clauses.

Mark Simmonds: I join the right hon. Gentleman in saying how pleased I am, Mr. Hood, to serve under your watchful eye. I and my hon. Friends congratulate the right hon. Gentleman on the enormous effort that he has put into his Bill, the excellent way in which he has held a disparate and diverse group of people together in order to progress it, and the excellent way in which he genuinely listened to the suggestions made by Member of all parties on Second Reading. Indeed, in consultation with the Minister, he has taken on board several of those suggestions, which we see in many of the new clauses.
As the right hon. Gentleman said, the amendments to clause 1 give us clarity and simplification, and we agree with them. However, I wish to raise two specific points about the wording. First, will the Minister say why the report will be laid before “either House” rather than both? I wonder why that wording was chosen. Secondly, it is important that the report does not stay in a dusty corner—if, indeed, there is one in the House of Commons Library. The Bill should make it clear that the report must be debated in the Chamber.
Generally, we support the simplification and clarity of the amendments as we do the changes that have been made by the right hon. Gentleman and the new clauses that will be proposed by the Minister.

Gareth Thomas: I join others who have welcomed the chance to serve again under your chairmanship, Mr. Hood, as I do the hon. Member for Boston and Skegness (Mark Simmonds) in paying tribute to the way in which my right hon. Friend the Member for Coatbridge, Chryston and Bellshill (Mr. Clarke) has conducted his efforts to take on board the wishes of the House on Second Reading. We have had extensive discussions in which he pressed forcefully and robustly the various points to strengthen the Bill that were made by many hon. Members on Second Reading. I hope that the amendments that have been tabled in my name and that of my right hon. Friend will be recognised as a way in which to strengthen the Bill.
The Government support the amendments tabled by my right hon. Friend. By way of clarification, I wish to say that the breakdown of bilateral aid by region  that was sought originally under subsection (2)(a) will now be covered under paragraph 2(1)(a) of new schedule 1, should the Committee accept it. We will report on the distribution of aid not only to Africa and Asia, but to Europe, the Americas and the Pacific. Similarly, the other requirements that my right hon. Friend listed originally under clause 1 will be covered elsewhere in the new schedule if the Committee is so minded to accept it.
The hon. Member for Boston and Skegness asked first about possible debates of the annual report. He will know that I cannot give him a guarantee in Committee that it will be debated annually. However, I shall draw his remarks to the attention of my right hon. Friend the Leader of the House, who will have read what hon. Members said about that on Second Reading. I am sure that the hon. Gentleman will recognise that neither I nor my right hon. Friend the Secretary of State have been shy about debating international development during our ministerial discussions.

Tobias Ellwood: Will the Minister clarify whether he will support an annual debate on the report? If he could put his thoughts about that on the record today, it would be helpful.

Gareth Thomas: The hon. Gentleman knows that it is not for Ministers to give such assurances at this stage. Nevertheless, I welcome every opportunity, not only annually, to debate international development in its widest sense. I welcome the chance to hold regular debates in Westminster Hall or at the end of business on the Floor of the House. The more the merrier is my approach.
The second point made by the hon. Member for Boston and Skegness concerned the specific language that has been used. The reference to “either House” was made to combine the annual report that is required under the Bill with any other departmental report that is published.

Tom Clarke: The Minister’s views reflect my own. He has said as much as we would expect him to say in the debate. However, it might be helpful if I say that I would certainly look forward to the report being debated annually in both Houses.

Amendment agreed to.

Amendments made: No. 15, in page 1, line 6, leave out from beginning to end of line 16 on page 2 and insert—
‘()In this Act, “relevant period” means—
(a)a period of 12 months ending with 31st December, in the case of information which is normally produced by reference to calendar years,
(b)in any other case, a period of 12 months ending with 31st March.’.
No. 16, in page 2, line 18, leave out
‘the end of the relevant period’
and insert ‘31st March each year’.—[Mr. Tom Clarke.]

Tom Clarke: I beg to move amendment No. 17, in page 2, line 18, at end insert—
‘()An annual report may revise anything contained in a previous annual report.’.

Jimmy Hood: With this it will be convenient to discuss amendment No. 18, in page 2, line 20, leave out from ‘State’ to end of line 24 and insert
‘lays before either House of Parliament.’.

Tom Clarke: As we have re-established this morning, the annual report is a major step forward, confirming Parliament’s role in making the Executive accountable. Amendment No. 17 would allow information to be updated if it was not available or if errors had been made; in moving it, I am trying to protect Parliament’s right to information.
Amendment No. 18 emphasises the point already made about the importance of both Houses of Parliament. As I have said, I hope that such an annual report will lead to debates in both Houses, hold the Executive to account and lead to an increased focus on these matters, in accordance with the desires of Parliament. I hope that I have been able to explain why the amendments are important, and I commend them to the Committee.

Mark Simmonds: I wish to make a very brief point. We have already strayed into the content of amendment No. 18, but I should like to ask the Minister about amendment No. 17. What thought has been given in DFID to ensuring that there is no unnecessary duplication between the DFID reports already in the public domain and the additional reporting that will rightly have to be done to meet the requirements of this legislation? That issue was rightly raised on Second Reading.
Will the Minister assure us that everything will be done to ensure that there will be no unnecessary work to meet the requirements of this legislation? Will he also ensure that DFID’s primary focus in reporting will be that it is for the purposes of parliamentary scrutiny? I am talking about the reporting structures proposed in the Bill, rather than those that already exist.

Gareth Thomas: I can give the hon. Gentleman the assurances he wants. We are certainly not in the business of doing unnecessary work. If, as we hope, the Bill is passed, it will standardise and put on a formal statutory basis the various requirements to report on international development to the House. The hon. Gentleman knows that we publish an annual report for Parliament. We shall have to change the nature of that report in a number of ways, and we shall do that to reflect the wishes of the House if the Bill is passed.

Michael Connarty: I want to say a brief word in support of the amendment, which has been welcomed by the Bill’s promoter, my right hon. Friend the Member for Coatbridge, Chryston and Bellshill.
I have known my right hon. Friend since I joined the Labour party in Coatbridge aged 16; he was a Labour party youth officer and a young councillor. He has accepted this amendment very much in the spirit of the  person I know him to be. As long as there are people such as my right hon. Friend in the House, they will make it their duty and concern to ensure debate on such a report, no matter to which House the report is made.
I support my right hon. Friend’s acceptance of the amendment, and should like to pay him a compliment. I have known him for a long time—I will not say how long—and he has always been the kind of person who would use such a report to the best effect, regardless of which House it is placed before.

Amendment agreed to.

Amendment made: No. 18, in page 2, line 20, leave out from ‘State’ to end of line 24 and insert
‘lays before either House of Parliament.’.—[Mr. Tom Clarke.]

Clause 1, as amended, ordered to stand part of the Bill.

Clause 2 - Coherence of United Kingdom contribution to poverty reduction and sustainable development

Question proposed, That the clause stand part of the Bill.

Jimmy Hood: With this it will be convenient to discuss the following: clause 4 stand part.
New clause 6—Policy coherence and Millennium Development Goal 8—
’(1) The Secretary of State shall include in each annual report such general or specific observations as he thinks appropriate on the effects of policies and programmes pursued by Government departments on—
(a) the promotion of sustainable development in countries outside the United Kingdom,
(b) the reduction of poverty in such countries.
(2) Such observations are to include observations on the pursuit of Millennium Development Goal 8, including in particular progress towards—
(a) the development of an open trading system that is rule-based and non-discriminatory and expands trading opportunities for low income countries,
(b) the development of an open financial system that is rule-based and non-discriminatory,
(c) the enhancement of debt relief for low income countries.
(3) In this section, ”Millennium Development Goal 8” means Goal 8 set out in the Annex to the document mentioned in section (Aid effectiveness and Millennium Development Goals 1 to 7)(2)(a), as that goal may be amended or modified from time to time.’.
And the following amendment thereto: (a), , leave out
“such general or specific observations as he thinks appropriate”
and insert ‘general or specific observations’.
At the end of the clause 2 stand part debate there will be a vote. The questions on clause 4 stand part and new clause 6 will be put without debate at the appropriate times. If Mr. Simmonds wishes to press his amendment to new clause 6, he can do so when the question is put on that new clause. I hope that that explains the procedure on this and subsequent clause stand part debates.

Tom Clarke: I am sure that the Committee understands with enormous clarity exactly what you have outlined, Mr. Hood. If we get anything wrong, I am sure that you will correct us.
I rise to speak to new clause 6, in which I have taken into account what my hon. Friend the Minister said on Second Reading. He was concerned about a possible overlap in the original draft of the Bill, and on reflection I decided to invite the Committee to replace clauses 2 and 4 with new clause 6, which is on policy coherence and millennium development goal 8.
The Committee is aware that on Second Reading I gave considerable prominence to policy coherence, which has been a Government objective for some time, and towards which we are making progress. Policy coherence is practised widely in Scandinavia and, as I saw for myself recently, it works in Sweden. It should of course be the subject of the annual report, and that is one of the purposes of the new clause.
It is important to include a clear and proactive endorsement of millennium development goal 8. The new clause would be a considerable improvement. How often have some of us attended marches and demonstrations on fair trade? We would therefore be right to make that an issue, which we would if the new clause were agreed to. It is important that the annual report should refer particularly to progress towards
“an open trading system that is rule-based and non-discriminatory and expands trading opportunities for low income countries”.
It is right, too, that we should ask for progress on
“an open financial system that is rule-based and non-discriminatory”.
I sense that the House is keen to monitor debt relief. The new clause would give this and future Governments the opportunity to do precisely that.
Such policies must be seen to be consistent with sustainable development, and I believe that the proposals will improve the focus of the annual report. New clause 6(1)(a) emphasises the importance of sustainable development even more strongly than the original Bill. I therefore commend new clause 6 to the Committee.

Jimmy Hood: I call Mr—

Tony Baldry: Baldry. I have a room next door to you, Mr. Hood. I shall drop in more often to remind you who I am.
The promoter of the Bill recognises, as we all do, that to get a private Member’s Bill through the House one must negotiate with the Government to ensure that they are content. The right hon. Gentleman has negotiated ably with the Government’s business managers, and we have a much respected former Chief Whip with us. Negotiating a private Member’s Bill through the Government’s legislation committee and so on, as the promoter has done, requires some skill. The quid pro quo, however, is that the Bill now effectively becomes a Government Bill. Hopefully the Government will therefore give it full endorsement by producing the annual report.
I say to the Minister that it is pretty scandalous that DFID gets only half an hour once a month for oral questions, whereas the Foreign Office gets a whole hour. When one thinks of the huge number of issues such as Darfur and Afghanistan that straddle Foreign Office and DFID policy, and the fact that DFID questions come on a Wednesday and the last 10 minutes are usually impossible to hear as the House does not have its full attention on the matters in hand, requesting an annual debate on DFID and its annual report is not unreasonable. After all, I think that the Wales Office still has a debate on St. David’s day, even though there is now a Welsh Assembly. The House would think it bizarre if there were not an annual debate on defence, and there are frequently two—one on defence and one on defence procurement.
The Minister is right that in the recent past we have had a number of debates on DFID matters in Government time, but that is because in the previous Parliament big United Nations conferences such as Johannesburg, Cancun and so on provided a peg on which Government business managers found it convenient to hang DFID debates. There is a danger that, if the Minister does not take back to his private office and ministerial colleagues the message from the Committee that there will be a riot if we do not get an annual debate on the report, DFID will be shuffled off into cosy little debates in Westminster Hall. It would be a bit like Sunday afternoon discussions with Christian Aid in the back room of the Methodist church hall in Bicester—although I know that those meetings are important, and I would not wish to underestimate them.
The point of the Bill is to have a report and a decent annual debate. The Minister should respond to the accommodating and constructive way in which the promoter and sponsors of the Bill have approached the matter. He should also make it clear that DFID will do its utmost to ensure, with the business managers, that we get an annual debate on the report provided for in the Bill and on DFID’s departmental report.

Mark Simmonds: I very much agree with the two general points that my hon. Friend made: the necessity for an annual debate on the report on the Floor of the House, and for an improved and extended opportunity for DFID questions. Bearing in mind the size of the budget for which DFID is responsible, I do not think that half an hour is long enough. My hon. Friend makes a good point that in the last five or 10 minutes of questions the House’s attention is sadly not necessarily on the important issues being discussed. In half an hour, and with five questions at the most, it is difficult to get into the level of detail required to hold Ministers to account on the way in which they control and allocate British taxpayers’ money.

Edward Balls: Does the hon. Gentleman agree that, while Treasury questions can play a positive role in allowing questions on the financial aspects of the Treasury’s role in development, that can only go part of the way to meeting his needs? That supports the idea of expanding International Development questions.

Jimmy Hood: Order. Before Mr. Simmonds is tempted any further, I should point out that we are moving away from the Bill. I advise him to come back to the substance of the Bill a bit more.

Mark Simmonds: Thank you, Mr. Hood. The issue is whether one gets answers to the questions in any Question Time. At Treasury questions that is not necessarily the case. Clause 2 sets out requirements for Departments other than DFID in their contributions to the reduction in poverty. New clause 6 makes provision for the Secretary of State to make observations about the effect of policies and programmes on the promotion of sustainable development and the reduction in poverty particularly with regard to MDG 8.
The right hon. Gentleman quite rightly highlighted some of the key elements of MDG 8, but there are other important areas that I hope the report will specifically address, such as the special needs of landlocked states and small island developing states. There are issues relating to the development of youth policies, and to pharmaceutical companies providing access to affordable drugs in developing countries, in which the Minister is particularly interested. There is also the issue of information and communication technologies, which enable economies to grow in developing nations and thereby alleviate poverty.
In general, we agree with the merging of clauses 2 and 4; it creates clarity and simplicity. My amendment (a) relates to the wording of new clause 6. New clause 6 would ask the Secretary of State to include observations on policy and coherence and transparency “as he thinks appropriate”. We are concerned that that means that the Secretary of State would not have to report on these vital issues if he saw fit. The wording makes it optional: it is at the Secretary of State’s total discretion. We believe that it should be at Parliament’s discretion whether he reports on these issues.
The other point about new clause 6 is that clause 2 relates to the work by Departments other than DFID to alleviate poverty, thereby meeting millennium development goal 8. Trade is a very good example. The DTI will have a major impact on that. We are obviously all disappointed with the results of the World Trade Organisation meeting in Hong Kong. The Minister made it clear that the money resolution we debated on Monday does not cover the work that will be done by other Departments; it covers only the work done by DFID. If that is the case, new clause 6 would not allow other Departments to participate in the very important work that the joined-up government would have to do to meet MDG 8. I shall be interested to hear the Minister’s response to those specific points.

Tobias Ellwood: I endorse what my hon. Friend said about the focus that is required in new clause 6. When we try to help countries in Africa and around the world to move forward and get off their knees from their debt and other problems it can be almost like dealing with a gambler. We can give them money, but we cannot cure them of the problems that cause their poverty. Many  of the countries in Africa that I have visited are in that state not only because of droughts and other factors that are perhaps out of their control, but because of corruption in their Governments. The focus that new clause 6 brings to MDG 8 is critical. It represents an opening of trading and financial systems including a commitment to good governance. That is fundamental as otherwise we are simply pouring good money after bad. I reiterate my endorsement for amendment (a), which specifically requires a consideration of this matter to be reported back for us to debate in the Chamber.

Gareth Thomas: I join in encouraging the Committee to support my right hon. Friend’s new clause and to resist clauses 2 and 4 standing part of the Bill. As my right hon. Friend said, and as I made clear on Second Reading, the Government support the intention behind clauses 2 and 4. New clause 6, to which my right hon. Friend spoke, helps to resolve any duplication in those clauses.
I should point out that one or two changes that are not included in new clause 6 are dealt with elsewhere in the Bill for the sake of clarity.
Clause 4 deals with untied aid. I would argue that that is a matter of aid-effectiveness rather than of policy coherence, and new clause 5, which I hope the Committee will support, contains references to untied aid so that the Department can continue to report on it. Clause 4 also seeks a report on progress in fulfilling millennium development goal 8 in respect of various issues specified in clause 7(2). As millennium development goal 8 is specifically mentioned in the clause, a further list of issues to be included would be confusing and unnecessary, which is why they are not in my right hon. Friend’s new clause. The requirements to provide some sectoral breakdown of bilateral aid in clause 4 would be better sited in the proposed new schedule that deals with financial reporting, which we will consider shortly.
The hon. Members for Banbury (Tony Baldry) and for Boston and Skegness made the case for more time for DFID questions, as did other hon. Members on Second Reading. As the hon. Member for Banbury knows, I cannot give him the assurance that he craves now, but I will further consider his additional point. I confess that I was slightly shocked that he thinks Members are not listening in the last 10 minutes of DFID questions. I had assumed that the rising noise was acclamation for what Ministers were saying.
My hon. Friend the Member for Normanton (Ed Balls) rightly drew attention to the many other Departments that have an impact on international development, and in the spirit of a clause about policy coherence it is right to draw the Committee’s attention to the fact that there are opportunities to explore issues relating to millennium development goal 8 across a wide range of Departments.
The hon. Member for Boston and Skegness referred to the money resolution. I reassure him that simply because the Bill will not require substantial amounts of money to be spent by other Departments does not mean that we will not be reporting on other Departments’ contributions to the cause of international development. He rightly made the case for other requirements in millennium development goal 8, beyond what is in the new clause, to be reported on. For example, in target 14 on small islands we have a series of responsibilities in respect of overseas territories on which we will continue to report. The hon. Gentleman was right to say that we are working on issues relating to unemployment rates and how to encourage private sector growth to facilitate more employment. As he said, I have an interest in the issue of access to essential drugs and we want to report progress on that matter. I reassure the Committee that the other elements of millennium development goal 8 will be reported on as appropriate.
I heard loud and clear the requests for more time for debates on development and I will draw the attention of my right hon. Friend the Leader of the House to the issue. We have not been shy of having debates and I look forward to more to come; that is an inevitability. I urge the Committee to support new clause 6 and to oppose clauses 2 and 4.
I am genuinely not persuaded that the amendment tabled by the hon. Member for Boston and Skegness is necessary. The Secretary of State will have to judge which general or specific observations to include in the annual report. It seems sensible to acknowledge that, as we propose to do in the Bill.

Question put and negatived.

Clause 2 disagreed to.

Clause 3 - International development assistance and gross national income

Question proposed, That the clause stand part of the Bill.

Jimmy Hood: With this it will be convenient to discuss the following:
Government new clause 1—Statistics to be reported.
Government new schedule 1—INFORMATION TO BE INCLUDED IN ANNUAL REPORT.
Government amendment No. 11.

Mark Simmonds: On a point of order, Mr. Hood. I may have misunderstood the mechanics of the Committee, but I wonder what has happened to my proposed amendment (a) which was grouped under clause 2. I did not have the opportunity to withdraw it or press it to a vote.

Jimmy Hood: I mentioned earlier that amendment (a) to new clause 6 would be put to a vote when the questions are put on the new clause. Is that clear?

Mark Simmonds: Yes. Thank you.

Gareth Thomas: I rise to encourage support for new clause 1 and new schedule 1 and to urge the Committee to vote against clause 3.
The proposed new provisions are a sensible way to clarify the Bill and to avoid it becoming overburdened with detail. My right hon. Friend’s Bill speaks of international development assistance. That might be a term of common parlance, but it is not in general use by development statisticians, and therefore it needs to be adapted.
The requirements on financial reporting will be expressed in general, readily understandable terms, with the definitions of such terms set out in the annual reports that are laid before Parliament, rather than in the Bill itself. That enhances the Bill and helps to avoid it becoming too technical. On that basis, most of the requirements in this area of the Bill and elsewhere are related simply to aid of various kinds. That would be interpreted in the annual report in terms of the internationally agreed definitions of aid that are already in common use. Examples are the use of DFID programme aid or gross public expenditure on aid, both of which are reported on a financial year basis.
The only exception to that general rule of thumb is when there is a requirement to provide data on official development assistance, which is a particular definition of international development assistance that is used by the development assistance committee of the Organisation for Economic Co-operation and Development. Owing to the importance of the UN’s 0.7 per cent. target for overseas development assistance as a percentage of gross national income, that term—overseas development assistance—will continue to appear specifically in the Bill. I should mention that overseas development assistance is reported on a calendar year basis.
The proposed schedule subsumes all the requirements for financial reporting that are included in the Bill. It subsumes the series of requirements in clause 3, the overseas development assistance gross national income data from clause 6, the regional breakdown of bilateral aid in clause 1, the breakdown of multilateral aid in clause 5, and the sectoral data from clause 4. Paragraph 2(1)(c) of the new schedule sets out a particular requirement to report bilateral aid by sector. It may be helpful if I confirm that such aid is usually broken down by reference to the following broad sectors: economic, education, health, governance, social, humanitarian assistance, rural livelihood and environment.
The hon. Member for Bournemouth, East (Mr. Ellwood) raised the issue of humanitarian assistance on Second Reading. I draw his attention to the proposed new schedule and the reference that it includes on reporting on humanitarian assistance, which I hope he and other Committee members will regard as a helpful step forward.

Mark Simmonds: I join the Minister in accepting and acknowledging the necessity of reworking this part of the Bill. We do not have an issue with the way in which the Bill has been structured, in that the information should be included in a schedule attached to it, but what is the logic behind Government amendment No. 11, which would remove the words
“development assistance as a proportion of gross national income”,
and replace them with
“and the breakdown of such aid”?
What does that change mean?
The other more generic concern on the content of the report as detailed in the Bill, under the proposed new schedule, is that all the information that is being requested is merely about the inputs, not the outputs and their effectiveness. I suggest that most, if not all, of the information that will be detailed in the report is already in the public domain through other reporting structures used by the Department for International Development.
The Bill should be the foundation—a major building block—for the assessment of the effectiveness of the British taxpayers’ money that is rightly spent on alleviating poverty and trying to meet the millennium development goals. However, the way in which the new schedule is structured does not seem to allow sufficient information to be put into the public domain to enable an informed debate to take place, hopefully annually, on the Floor of the House. The argument against doing so is that it may take an enormous amount of work by DFID civil servants. I do not think that that is necessarily an excuse.
You will be sorry to have missed a debate yesterday, Mr. Hood, about an additional, replenishment sum of money going into a section of the World Bank that is euphemistically called the International Development Association. IDA 14 has included, for the first time, the analysis of effectiveness in terms of a results-based management system; it also has a full disclosure of countries’ performance ratings. If it is possible to do that in one part of the DFID structure, why is it not possible to do so across the board? Why is it not possible to put that sort of analysis in the Bill?
DFID has stated that the IDA is an effective instrument, with a 25 per cent. efficiency gain. Obviously, such analysis is taking place in the Department and, presumably, to come to that conclusion DFID has had to make comparisons with other projects and with the effectiveness of other streams of British taxpayers’ money. I should like to see that sort of analysis in the report. I do not see why such matters should not be added to the new schedule, which is, at the moment, purely about inputs, not outputs and effectiveness.

Pete Wishart: I have just one question for the Minister on new schedule 1. Will aid that comes from DFID that has been distributed from other sources be included under the schedule and accounted for? I am thinking of where DFID gave money, through USAID, for some spending in Malawi in 2004. Many of us are concerned about how that money has been spent, especially given the priorities of USAID.

Ann McKechin: I should like the Minister to clarify whether, in respect of sub-paragraph (f) of new schedule 1, the Government intend to include some indication of their decision making in multilateral organisations, such as the International Monetary Fund and the World Bank, how they vote at meetings and any statements that they make.
Perhaps my hon. Friend could clarify another thing. He mentioned how the Government would describe how assistance was provided in respect of child mortality and HIV/AIDS, but will there be any analysis of how aid is spent according to gender and to tackling disability in the developing world? Is it intended that the report will make mention of those matters?

Tobias Ellwood: I should like also to address the arguments made my hon. Friend the Member for Boston and Skegness. However, first I must thank the Minister for adding the concerns of humanitarian assistance; it is welcome to know that when Members make comments in the Chamber those on the Government Benches listen. This is the first time that that has happened—

Gareth Thomas: Do not get carried away.

Tobias Ellwood: I will take stock of that, but I am very pleased that I have at least had one success.
How the money is spent is the important aspect. What yardstick of success will the Minister use to decide whether the money is being spent efficiently? The major concern is whether the money has been hived off or competitive quotes have not been taken. Reporting back on whether these millions of pounds have been spent efficiently is important.
Another yardstick of comparison is how much money is put forward by other countries. Does the Minister intend to give us an idea of our spending in relation to that of other developed countries that are helping developing countries around the world?

Gareth Thomas: I will take that final point first. The Bill places extensive reporting requirements on DFID about British aid, so we are not about to start also reporting on other countries’ aid in that annual report, except where there is direct relevance to the distribution of our assistance.
I will deal with the other issues in the order in which they arose. Government amendment No. 11 will make the language of the title of the Bill accord with the proposed changes in new clause 1 and the new schedule. Its purpose is simply to ensure that the long title correctly reflects the various provisions in the Bill.
The hon. Member for Boston and Skegness suggested that the new schedule talks only about inputs. In broad terms, I accept that he is right, but I suggest that he looks at the provisions of the Bill as a package. For example, new clause 5 talks about the Secretary of State having to make an assessment of the “effectiveness” of spend. [Interruption.] If the hon. Gentleman and other Members are successful in securing even more Government time for debate on international development, they will have regular opportunities to continue to probe and question the effectiveness of the Secretary of State’s judgment on how aid moneys are spent.
The hon. Member for Perth and North Perthshire (Pete Wishart) asked whether British aid that is distributed through other organisations will be reported on. Essentially, that is covered by our requirement to report on how we spend our money in particular countries. Obviously, if we are spending it through other organisations, that will still be covered under the Bill’s requirement on us to report. A minimum of 20 countries is proposed, and we will come to that in due course. I do not accept the hon. Gentleman’s view of the spend in Malawi, but perhaps that is a debate for another time.
My hon. Friend the Member for Glasgow, North (Ann McKechin) asked whether we would be reporting on every decision made by a multilateral organisation. Given how many multilateral organisations we fund, it would cost a huge amount to report on each and every decision they make, so we are not proposing to do so. My hon. Friend also asked about issues around gender, and how British aid is used to promote the empowerment of women. That is reflected in millennium development goal 3. As my right hon. Friend the Member for Coatbridge, Chryston and Bellshill has said, he is proposing to include the MDGs in the Bill, so we would have to report on that matter.

Mark Simmonds: Will the Minister address the point that I made about analysis of the effectiveness of aid elsewhere in DFID—the country rankings in IDA 14? Is he prepared to consider putting such a provision in the Bill, particularly given that he has accepted the argument to increase the number of countries on which to report from 10 to 20? Will he examine the ranking of those; it is clearly going on elsewhere in his Department?

Gareth Thomas: The hon. Gentleman has already asked me to ensure that we do not report on one set of issues separately to those that we are required to report on under the Bill. I am all for such efficiency savings. If there is a way of helpfully combining work that is being done elsewhere by the Department with the work that the House will require us to do as a result of the Bill, we will of course seek to gather the information for Members to digest.

Question put and negatived.

Clause 3 disagreed to.

Clause 4 disagreed to.

Clause 5 - Multilateral development assistance and Millennium Development Goals 1 to 7

Question proposed, That the clause stand part of the Bill.

Jimmy Hood: With this it will be convenient to discuss the following: clause 7 stand part.
New clause 5—Aid effectiveness and Millennium Development Goals 1 to 7—
‘(1)Each annual report must include the Secretary of State’s assessment of the following matters—
(a)what progress has been made generally towards the achievement of Millennium Development Goals 1 to 7,
(b)the effectiveness in pursuing Millennium Development Goals 1 to 7 of multilateral aid generally to which the United Kingdom contributes,
(c)the effectiveness in pursuing Millennium Development Goals 1 to 7 of bilateral aid provided by the United Kingdom to not fewer than 20 countries specified in the report, selected according to criteria so specified,
(d)what progress has been made in promoting untied aid.
(2)In this section—
(a)references to “Millennium Development Goals 1 to 7” are to Goals 1 to 7 set out in the Annex to United Nations General Assembly document A/56/326 dated 6th September 2001, entitled “Road map towards the implementation of the United Nations Millennium Declaration: Report of the Secretary General”, as those Goals may be amended or modified from time to time,
(b)“untied aid” means aid which falls within subsection (3).
Aid falls within this subsection if—
(a)it is either not subject to a condition restricting the states from which goods or services may be purchased using the aid, or (if it is subject to such a condition) the states from which goods or services may be purchased using the aid include all the member states of the Organisation for Economic Co-operation and Development and substantially all states which receive aid from any source, and
(b)the provider of the aid has, so far as reasonably practicable, secured that there will be no significant impediment in the purchasing process which would have the effect of a narrower restriction than that mentioned in paragraph (a) on the states from which goods or services will be purchased using the aid.’.
And the following amendment thereto: (a), in line 9, leave out
‘selected according to criteria so specified’
and insert
‘which shall be the 20 recipients of the greatest amount of United Kingdom bilateral aid’.

Tom Clarke: In new clause 5 I propose to merge clause 5, which deals with the effectiveness of multilateral aid in achieving millennium development goals 1 to 7, with clause 7, which deals with the effectiveness of bilateral aid. Again, I propose that we specifically make reference to the MDGs. The hon. Member for Banbury, in remarks that I otherwise agreed with, said something about this being a Government Bill. I do not want to develop the point too much, but if he were a fly on the wall he would not reach the same conclusion, and that is reflected in what I am proposing to the Committee.
New clause 5 also deals with tied aid, which was in clause 4, as I am now convinced that this is a matter of aid effectiveness rather than policy coherence. After consulting hon. Members from all parts of the House, and given that all UK bilateral aid agreed since 2001 has been untied—indeed tied aid has been outlawed—I have chosen to focus instead on the more positive promotion of untied aid, of which the UK is in the vanguard in the EU and the Development Assistance  Committee. The changes that I propose identify and celebrate the UK’s position as a world leader in this matter.
After consulting my hon. Friend the Minister—I want to acknowledge a positive Government contribution, because I am trying to be as even-handed as I have been from the beginning—I am pleased to propose that, in line with the important points put forward on Second Reading by the hon. Members for Boston and Skegness, for Bournemouth, East and for Kettering (Mr. Hollobone), the cap on the number of countries under scrutiny in the Bill shall be increased to a number not fewer than 20, with room for the Government of the day to focus on even more should they choose to do so. I understand that the Minister will wish to add his comments to what I have just said.
By way of explanation, reference to humanitarian assistance has been removed from the new clause and included in the schedule. To say in the new clause that bilateral aid includes humanitarian assistance would imply that elsewhere it does not. Moreover, humanitarian assistance is not primarily aimed at MDGs 1 to 7, which is the principal focus of the new clause, which I commend to the Committee.

Philip Hollobone: I congratulate the right hon. Gentleman on his remarks and on listening to many of us who were concerned that the scope of the Bill as it first appeared was too narrow. Reporting on at least 20 countries makes far more sense. However, I have a concern—it is genuine, which might be unusual for this place—about countries such as Zimbabwe, whose regime we despise. We give the Zimbabwe Government no official aid, but non-governmental agencies provide humanitarian assistance. Would that be picked up and reported on under the new clause?

Pete Wishart: Having listened to the right hon. Member for Coatbridge, Chryston and Bellshill, I am satisfied that there will be clarity. He has given assurances about the tied aid that the UK Government give bilaterally and multilaterally. However, can he assure me that we will have clarity on aid that is given by the World Bank and which is tied to economic policy? I am thinking particularly of Mali, where the railroad was privatised at great expense and at a great cost to jobs and the country’s economic performance. Can we ensure that any reporting makes clear the economic policy conditions to which UK assistance might have been indirectly tied? I am thinking primarily of institutions such as the World Bank. Can we have assurances that any reporting will provide clarity and show whether there are economic ties to DFID’s contributions to the World Bank and other multilateral agencies?

Mark Simmonds: I agree with the right hon. Member for Coatbridge, Chryston and Bellshill that humanitarian aid is a necessary and important addition to the Bill, but the current provision is not the appropriate place for it. The fact that such aid has been included in the new schedule is a testament to my hon. Friend the Member for Bournemouth, East, as well as  to the right hon. Gentleman and the Minister, who listened to the Second Reading debate and made that important addition to the Bill.
I am also grateful to the right hon. Gentleman and the Minister for listening to the points that were made on Second Reading about the need to carry out analysis of specific millennium development goals, rather than the sectoral analysis that might have been deemed appropriate at one point. That is a significant step forward, particularly because it will, I hope, allow the effectiveness and delivery of British multilateral and bilateral aid to target countries to be analysed.
Amendment (a) to new clause 5 relates to the number of countries on which we shall have to report. The right hon. Gentleman must take enormous credit for corralling and persuading the Department to increase the number from 10 to 20. I very much welcome the commitment that he and the Minister have given to report on more than 20 countries, and the annual report will have to include details on a minimum of 20. However, I am concerned about the wording of the new clause, which my amendment seeks to address. New clause 5 states that the report must deal with
“not fewer than 20 countries specified in the report, selected according to criteria so specified”.
I cannot find where in the Bill those criteria are specified or what they are. I do not know whether they are the Minister’s personal criteria or specifications, based on which countries received him with the most luxurious accommodation or the best wine. The amendment is therefore important. It states that the 20 countries should be
“the recipients of the greatest amount of United Kingdom bilateral aid”
—the countries that receive the greatest amount of British taxpayers’ money. That is not an unreasonable request, and I shall be interested to hear the Minister’s response.
I should also like to draw the Committee’s attention to the provisions that were in the original Bill, but which have been amended today and which will not be included in future. Under clause 2, the report must
“show to what extent action taken by the Government of the United Kingdom, across all departments, in relation to one or more countries outside the United Kingdom, assists in contributing to a reduction in poverty”.
That provision has now been removed. We believe that there should be an independent analysis of the effectiveness of the UK’s bilateral development assistance in respect of each millennium development goal. Again, I can find that nowhere in the Bill.
I return to the point that I made earlier: in relation to IDA 14, an analysis takes place within DFID on country rankings. We would like to see those rankings included in the report, so that we can analyse and debate the effectiveness of British aid and decide whether those funds need to be reassessed and reallocated to ensure the maximum alleviation of poverty and the maximum progress towards meeting  millennium development goals 1 to 7. We would like a more robust and detailed account of the effectiveness of British aid, showing how resources have been allocated from the previous year’s report—that obviously cannot happen with the first year’s report.
The Bill makes no mention, either in the original or the amended versions, of direct budgetary support. A significant amount of British taxpayers’ money is clearly going through direct budgetary support—it is going from DFID directly to recipient Governments rather than through NGOs or other mechanisms. Since 2000, £1.5 billion of British taxpayers’ money has gone through direct budgetary support. The Opposition are supportive of direct budgetary support, but there is not necessarily enough analysis of it.
Monitoring what happens to that money is important. The Minister will be aware that significant percentages are rumoured not to end up where they are supposed to go, and we should have greater control and monitoring of where the money goes. The entire DIFD budget is predicated on support from the British electorate, which is based on the effectiveness of outputs rather than inputs.
As we have recently seen, problems are emerging in Uganda and Ethiopia—countries that we have provided with direct budgetary support—and the Secretary of State and the Minister have quite rightly reduced the funding going to those Governments because of the way in which they are operating. I do not see why the important role of building capacity, both economically and democratically, and of building civil societies, should not be included in the Bill.

Tobias Ellwood: I endorse amendment (a) tabled by my hon. Friend the Member for Boston and Skegness. It is Parliament’s purpose to scrutinise what the Government are doing. If we are spending an awful lot of money—wisely, I hope—it is important that we scrutinise where it is going. It is a logical extension to seek to monitor the 20 countries that receive the most money from the UK.
I am pleased that humanitarian aid has been included, but the provision needs to be seen alongside longer-term interests. Humanitarian aid is immediate aid: it is there to help a state, region or area overcome a particular challenge—whether famine, flood or the aftermath of civil war. It is not designed to be permanent; it is to help in emergencies. It should be used alongside efforts to assist the state, the region or the area in sustaining itself, and both sides of that equation need to be monitored.

John Barrett: Will the Minister give us clarity on that point about the 20 countries? As the wording stands, there is a possibility that the provision could apply to the 20 countries that receive least aid. That needs to be clarified.

Gareth Thomas: I clarify that I am urging members of the Committee to oppose clauses 5 and 7 standing part of the Bill. Similarly, I urge the Committee to support my right hon. Friend’s new clause 5.
As I highlighted on Second Reading, the Government were worried about the potential for duplication in clauses 5 and 7 as drafted and my right hon. Friend’s proposal is an extremely helpful way to resolve it. New clause 5 goes beyond that requirement and includes the need to report progress in achieving millennium development goals 1 to 7 and the role of UK bilateral aid to that end. It is an important additional benefit of new clause 5, which reflects not only what my right hon. Friend has been saying in private but the concerns expressed on Second Reading by hon. Members on both sides of the House.
As my right hon. Friend said, the new clause extends the number of bilateral aid programmes to be reported on from 10 to not fewer than 20, which the Government support. For the duration of this Parliament—I cannot make a commitment beyond then—it is the intention of my right hon. Friend the Secretary of State that the annual report will cover 25 countries. [Hon. Members: “Hear, hear.”] Those 25 will be the countries on which we are required to report to the Treasury under public service agreements on the effectiveness of our aid. It seemed sensible to bring what the Bill requires us to report to Parliament into line with what we are rightly required to report to the Treasury.

Mark Simmonds: Is there a difference between the reports to the Treasury and those on the largest recipient countries? Are they the same 25 countries and if not, why are they different?

Gareth Thomas: The hon. Gentleman pre-empts my next point: the 25 PSA countries account for about 65 per cent. of the bilateral aid that we disperse. The effect of his amendment would be to require us to report on only 47 per cent. of our aid. I hope he will accept that the Committee should resist the amendment, given my additional commitment for the duration of this Parliament.

Tom Clarke: I do not wish to prolong the Committee but what the Minister said is so important that it is right to acknowledge it. What he said about 25 countries is very welcome; indeed, it goes beyond what was requested on Second Reading. We also see the wisdom of linking the requirements to PSA countries. Therefore, my hon. Friend should feel comfortable that the Committee—I am sure that I speak for all its members—welcomes what he said and hopes that other Governments will emulate his commitment.

Gareth Thomas: I am grateful for my right hon. Friend’s comments. We were minded to increase the requirement in the Bill to report on 10 countries to report on not fewer than 20, in order to provide safeguards in future Parliaments that Governments will have to report in more substantial ways than they might have wanted in the past.
The breakdown of multilateral aid according to the main categories of organisations that we use, which was originally sought in clause 5(1), is now in paragraph 3 of the new schedule, which I hope the Committee will accept. A requirement to report on  untied multilateral aid was originally in clause 5(2); there is a requirement in new clause 5 to report on progress in promoting untied aid, which can capture developments in both multilateral and bilateral fields. A list of issues in clause 7(2) will be dropped, as the new clause encapsulates a requirement to report on progress in meeting millennium development goals 1 to 7. That subsumes the need for the original list.
The hon. Member for Kettering asked me about cases in which we do not provide aid directly to a Government, such as in Zimbabwe. We will have to report on all the ways in which we deliver aid to countries. It might be through UN organisations and non-governmental organisations, as in the case of Zimbabwe, or as we prefer, directly to a reforming Government and where there are appropriate safeguards.
The professed support of the hon. Member for Boston and Skegness for budget support seems, given the way in which he has developed arguments over recent weeks, to be of the same degree that a noose gives to a condemned man. I would be interested to hear, in one of the future debates that we shall no doubt have, to which countries he thinks we are right to give budget support.
The hon. Member for Perth and North Perthshire asked me about economic conditionality. He will know that my right hon. Friend the Secretary of State published our view on that point last March. He made clear our pledge that none of our bilateral aid would have economic conditions attached to it, and that we would press the multilateral organisations with which we work—particularly the World Bank and the International Monetary Fund—to make progress in that regard.
I do not think that the hon. Gentleman had the good fortune to be called to serve on the Committee that looked yesterday at the 14th replenishment of the IDA part of the World Bank. We had a lengthy discussion about the economic conditionality used by the World Bank, and the progress that the bank is making. When the Government make significant policy shifts on economic conditionality, such as that initiated by my right hon. Friend the Secretary of State last year, I expect them to be included in the annual report.

Mark Simmonds: This is not the time to debate the rights and wrongs of the policy of direct budgetary support—you would quite rightly rule me out of order if I were to try to do so, Mr. Hood. That said, the Minister did not specifically answer my question as to why British taxpayers’ money going into direct budgetary support is not covered in the Bill.
I do not dispute the figures that the Minister gave, but he said that the PSA countries take up 65 per cent. of British bilateral aid, as against the top 20 which take up 47 per cent. The House of Commons Library believes that the figure is 62 per cent. I accept that that is less than 65 per cent., but there is a clear disparity between those figures. The Minister may not be able to respond to that point now, but I would be grateful if he could write to me setting out how he arrived at those percentages, so that we can return to the matter on Report if necessary.

Gareth Thomas: I cannot explain any discrepancy between what the House of Commons Library said to the hon. Gentleman and the figure that I gave, but I will of course write to him to clarify the figure that I used, if indeed it is wrong, or to explain the discrepancy.
On the question of bilateral aid in the form of budget support to Governments, we will be required by the Bill to report on the money that we give, both in terms of its financial value and its effectiveness. The hon. Gentleman will have opportunities to use the annual report to explore both his position and the Government’s on budget support.
During this exchange I have had the opportunity to reflect on the point about the figure of 65 per cent. I am told that the hon. Gentleman and the Library are right, and that the correct figure for the top 20 countries is 62 per cent. He gave the figure that the top 20 recipients are worth some 47 per cent. of DFID bilateral aid; the figure actually stands at 42 per cent.

Question put and negatived.

Clause 5 disagreed to.

Clause 6 - Progress towards net expenditure target

Question proposed, That the clause stand part of the Bill.

Jimmy Hood: With this it will be convenient to discuss the following: New clause 4—Progress towards United Nations 0.7% expenditure target—
‘The Secretary of State shall include in each annual report his assessment of the year in which he expects that the target for expenditure on official development assistance to amount to 0.7% of gross national income will be met by the United Kingdom.’.

Tom Clarke: The new clause deals with one of the most important issues in the Bill: progress towards the UN target of 0.7 per cent. of gross national income. For the purposes of simplicity, provision for the historical financial reporting on official development assistance as a proportion of GNI has been moved to the schedule. Again that takes into account representations made on Second Reading concerning repetition and streamlining of the Bill. Other than that, the new clause is substantively the same as the one that it seeks to replace. In other words, it contains the clear commitment.
I am privileged and delighted to put the new clause before the Committee. If it is endorsed by the Committee and by Parliament, it will be the first time that the UN target of 0.7 per cent. of GNI has been embraced in statute. The Committee will know that for 36 years, all Governments have been committed to obtaining that figure. The late Judith Hart, the Minister’s predecessor, played a formidable role in seeking to achieve it, and we acknowledge that today. However, over those years, there have been ups and downs, and the plain and simple fact is that we have never made it. The House will want to know what has been achieved, and how we are reaching the target and staying there. What better way could there be of doing so than by recording progress in the annual report that we propose and which is at the heart of our discussions today? I commend the new clause to the Committee.

Mark Simmonds: I agree with the right hon. Gentleman. This provision is probably the most significant aspect of the Bill. He is right to state that the ambition has not hitherto been put in statute, even though it has been an aspiration—I use the word loosely—of most of the developed world since the late 1960s and early 1970s. As he and, I hope, the whole Committee will be aware, the Opposition support the achieving of the 0.7 per cent. target by 2013, and we will do all we can to ensure that it is reached.
I have some general questions for the Minister. Have he and his officials given any thought to reporting this element? Will they break down how the 0.7 per cent. is being achieved as the years go by towards 2013? Will the split between multilateral aid, bilateral aid, debt relief, humanitarian aid and technical assistance—all elements that make up the total DFID budget—be documented in the report? If so, will it include the methodology of the split between multilateral assistance and bilateral assistance? Where and how the resources are allocated between those two largest areas of British aid seems relatively arbitrary at the moment.

Gareth Thomas: I support my right hon. Friend’s new clause and I urge the Committee to oppose clause 6. His new clause helpfully clarifies the requirement to report on the UN 0.7 per cent. target. The other elements of financial reporting set out in clause 6 are best addressed with all the other requirements for financial reporting in the new schedule that I propose.
I assure the hon. Member for Boston and Skegness that we will seek to break down how we spend the UK’s development budget, so that hon. Members from all parts of the House will be clear about the methods by which we are making progress towards the 0.7 per cent. target With that, I support my right hon. Friend’s new clause.

Question put and negatived.

Clause 6 disagreed to.

Clause 7 disagreed to.

Clause 8 - Transparency

Question proposed, That the clause stand part of the Bill.

Jimmy Hood: With this it will be convenient to discuss the following:
Government amendment No. 10
Government new clause 2—Transparency.
And the following amendments thereto: (a), in line 1, leave out
‘such observations as he thinks appropriate’
and insert ‘observations’.
(b), in line 13, at end add—
‘()Observations made in accordance with subsections (1) and (2) shall be made in respect of each of the countries specified under section (Aid effectiveness and Millennium Development Goals 1 to 7).
Government amendments Nos. 12 and 13

Gareth Thomas: Perhaps it would be helpful if I set out our concerns about clause 8 and explain why I am urging the Committee to decide that it should not stand part of the Bill and why I am proposing the new clause. The concerns relate to subsection (2)(a) and (b) in particular. The substance of subsection (1) is included in the new clause.
I outlined on Second Reading our concerns about subsection (2)(a)(i). One of the great innovations of this Government, and in particular of my right hon. Friend the Chancellor, has been to initiate comprehensive spending reviews to give Departments some clarity about their level of funding over a three-year period, as opposed to the one-year annual budgeting cycle that existed prior to that. However, the subsection goes beyond what we could reasonably expect to provide detailed information on. I recognise the desire for Members to have some sense of future commitments to developing countries, which is why the wording in the new clause is intended to commit the Government to giving additional information, where possible, on future spending plans, in so far as they have been agreed, in developing countries.
We are doing that not only for the benefit of hon. Members, but because we want to see donors moving towards giving predictable aid to developing countries over the long term. I will give an example of the merit of that. Finance and Health Ministers in a developing country might want to recruit additional nurses and doctors to help meet the desire to get universal access to antiretroviral drugs, but might be worried about whether donors will continue to provide the additional resources necessary to pay the salaries of those doctors and nurses. They might be worried that the developing country would be left with a huge financial requirement that it does not have either the domestic tax revenues or the donor assistance to meet. We want to move to a situation in which there is some sense of predictable aid flows to developing countries—subject, of course, to their continuing good performance. However, as I said, subsection (2)(a)(i) goes beyond what we can currently do.
I recognise the appetite, too, in subsection (2)(a)(ii) to
“specify the development objectives in that country”.
However, what we seek to do with our development assistance is to come in behind the developing country’s own development priorities, as set out in its poverty reduction strategy. The current wording of subsection (2)(a)(ii) goes beyond that sense of country ownership that we seek to promote in spending our development assistance.
Lastly, perhaps it would help if I explained our particular concern about subsections (2)(b) and (2)(a)(iii). They would require us to secure and publish agreements with recipient countries for aid. Given that we give aid to some 130 countries—albeit much of it  involving relatively small sums of money—that could require us to try to negotiate separate agreements with each of those countries. I put it to members of the Committee that that would involve a disproportionate cost and would require a disproportionate effort on the part of staff. I hope that the requirement to report on a minimum of 20 countries—and, indeed, my commitment to go beyond that for the duration of the current Parliament—will provide a useful hook in an annual report for Members to debate the achievement of our development objectives as a result of our development assistance in certain countries.
I recognise the concerns that all Members have that money given by British taxpayers for development assistance must not be lost as a result of corruption. Therefore, it is appropriate that we take the opportunity provided by our new clause to ensure that the Government have a specific commitment to continuing to report on the fight against corruption in developing countries.

Mark Simmonds: As with the other new clauses, my party welcomes the simplification and clarity that the new clause provides by replacing clause 8. We also welcome the additional provisions on corruption and governance, which the Minister explained, and which he will know from comments on Second Reading cause concern to some of my party colleagues—and to Members from other parties as well.
I have proposed two amendments to the new clause. The first relates to a point I made in respect of a provision we debated earlier: we believe that the wording of the new clause will allow the Secretary of State to do what he or she sees fit, rather than what Parliament desires, which is to have the specific information referred to. Unusually, the Minister has not given a particularly full response on that point. I would like him to give a fuller response on why this amendment cannot be included. If he fails to do so, I will have no option but to return to this point on Report.
My amendment (b) to Government new clause 2 relates to aid effectiveness and millennium development goals 1 to 7. As the new clause is currently drafted, the report could get away with some general comments in a couple of paragraphs about those issues. We would like it to be made clear in the Bill that, in respect of the minimum of 20 countries—or of the 25 that the Minister has assured the Committee he will report on up to the end of this Parliament—the aid effectiveness will be analysed against the specific MDGs in those countries. Otherwise, DFID might choose to draw on only the most successful examples in a particular year.
The Minister started to address the other issue I would like him to deal with in his introductory remarks on the new clause. It is to do with the objective described in subsection (2)(a)(iii), which is to
“make provision for the independent monitoring and evaluation of the effectiveness of policy and expenditure in achieving its stated objectives”.
I share the Minister’s view that it would be totally unrealistic and not cost-effective to have to do that for all 130 countries to which DFID gives assistance.  However, I do not accept that it is unrealistic and not cost-effective to do so for the 20 or 25 countries in respect of which analysis of effectiveness will, as the Minister has accepted, be put in the annual report and I cannot see why that cannot be done.

Gareth Thomas: Let me deal, if I may, with the hon. Gentleman’s last point first. The issue is how we use our resources to strengthen the quality of Government systems in general in a developing country, particularly where we are giving budget support. That must be about how we strengthen the capacity of the Government to deliver assistance to developing countries in respect of education and health care, and how we help deliver better rule of law, effective police, good courts and so forth. It is also surely about how we help the citizens in that developing country to have confidence that their Government are spending properly the money that has been donated by countries such as ours and the money that has been collected from them in the form of taxation. We should therefore strengthen the quality of financial systems in the developing country and its independent audit arrangements as part of that process.
We have a responsibility not only to the individual poor people in the developing countries to which we provide assistance, but to the British taxpayer. We have to ensure that the auditing systems in those countries are robust and that we have further processes in place to check on the efficacy of our own spending there. As I indicated on Second Reading, our procedures for disbursing budget support or support to UN organisations, or indeed for disbursing financial support to NGOs, have been agreed with the National Audit Office.
We have to provide reports to the Comptroller and Auditor General. We have been given a clean bill of health every year to date for the effectiveness of our spend and the safeguards that we have in place. In addition, in developing countries we use a range of other audit arrangements such as the requirements of the World Bank and the IMF to give us confidence in the way those resources are being spent. Where we do not have confidence that our auditing arrangements are as robust as we would like, we have the opportunity to bring in independent auditors to monitor our current spend.
The hon. Gentleman’s concerns are misplaced. There are already robust systems in place to monitor the effectiveness of UK development assistance. In any case, we shall seek to strengthen still further the auditing arrangements in developing countries so that not only is our aid money well spent, but so are other moneys given to that developing country’s Government. Alongside our financial support, we also give considerable technical assistance to Governments to help them to continue to strengthen their financial systems, as well as individual assistance on occasion to anticorruption commissions or programmes of  support. Although the hon. Gentleman’s concerns are perfectly understandable, on this occasion they are misplaced.
I understand what the hon. Gentleman is seeking to do with amendment (a) to new clause 2, but again I am not persuaded of the need for it. I do not think it would achieve what he thinks it would. The Secretary of State will by definition have to continue to provide and include observations in the annual report. He or she will have to use their judgment as to what needs to be reported to Parliament. It is sensible to recognise that in the Bill. There are already and, if hon. Members have their way, there will be still more opportunities to question what is in the annual report and what progress the Government are making in helping to tackle corruption. Furthermore, various systems are already in place to report on the effectiveness of aid.
As for amendment (b), we are aware that important changes have been made relating to the issues set out in the new clause on aid effectiveness and the millennium development goals 1 to 7. Of course we will report on those developments because it would be a new, substantial issue. We would want to ensure that the House was aware of the progress in that area.
There is a danger that the provision that the hon. Gentleman wants to place in the Bill would require us to come up with parallel reporting. When there are substantial developments, I have given a commitment to report on them in the way we have already committed ourselves to doing in respect of an increased number of countries from 10 to 20—and to 25—during this Parliament.

Question put and negatived.

Clause 8 disagreed to.

Clause 9 - Definition of key terms

Question proposed, That the clause stand part of the Bill.

Jimmy Hood: With this we will take the following: clause 11 stand part.
Government New clause 3—Interpretation, and meaning of terms used in annual report.

Gareth Thomas: I commend new clause 3 on the basis that the various changes that have been made to the Bill have resulted in clauses 9 and 11 being redundant. The new clause necessarily streamlines the Bill and I hope that the Committee will accept it.

Mark Simmonds: As the Minister rightly said, the new clause clarifies matters and sets down the definitions of the terms set out under the Bill. I welcome the fact that there is an additional definition of untied aid, which was not originally in the Bill. Will he explain where the reporting structures for progress towards harmonisation should be outlined in the Bill? Is it appropriate to place them in this clause? Harmonisation should be welcomed when it works for the recipients of aid, but the Minister will be aware that worry has been expressed by certain developing countries that harmonisation is slowing down the process of delivering the necessary improvements that we all want. As was said to me not too long ago, there is also a danger that Governments are using it as a reason to “harmonise corruption” rather than to harmonise aid. I think that somewhere in the Bill, whether in clause 9 or elsewhere, reference should be made to the ever growing and important harmonisation issue to ensure that projects are sustainable and successful.
There have been examples of non-governmental organisations and others building a school and the funding running out after three years. After that, there is no funding to continue paying the teachers or to pay for the running of the school, so co-ordination and co-operation between various donors and recipient Governments are necessary. We support harmonisation, but do not understand where in the Bill it is analysed.

Gareth Thomas: As for the requirement to report on the effectiveness of our spend in respect of the 20 or 25 countries, we shall report on our efforts to promote harmonisation and development of assistance under the Bill. Although such matters are not explained under the general definition of reporting on the effectiveness of our spend, we shall report on our efforts to promote harmonisation and predictability of aid. With that explanation, I urge the Committee to support new clause 3. As I said, it is a useful streamlining of the Bill. I suggested inadvertently that clause 10 needed to be deleted. We shall come to that shortly.

Question put and negatived.

Clause 9 disagreed to.

Clauses 10 and 11 disagreed to.

Clause 12 ordered to stand part of the Bill.

Clause 13 - Short title and commencement

Amendment made: No. 10, in clause 13, page 7, line 27, leave out ‘9’ and insert ‘(Transparency)’.— [Mr. Thomas.]

Clause 13, as amended, ordered to stand part of the Bill.

New Clause 4 - PROGRESS TOWARDS UNITED NATIONS 0.7% EXPENDITURE TARGET

‘The Secretary of State shall include in each annual report his assessment of the year in which he expects that the target for expenditure on official development assistance to amount to 0.7% of gross national income will be met by the United Kingdom.’.—[Mr. Tom Clarke.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 5 - AID EFFECTIVENESS AND MILLENNIUM DEVELOPMENT GOALS 1 TO 7

‘(1)Each annual report must include the Secretary of State’s assessment of the following matters—
(a)what progress has been made generally towards the achievement of Millennium Development Goals 1 to 7,
(b)the effectiveness in pursuing Millennium Development Goals 1 to 7 of multilateral aid generally to which the United Kingdom contributes,
(c)the effectiveness in pursuing Millennium Development Goals 1 to 7 of bilateral aid provided by the United Kingdom to not fewer than 20 countries specified in the report, selected according to criteria so specified,
(d)what progress has been made in promoting untied aid.
(2)In this section—
(a)references to “Millennium Development Goals 1 to 7” are to Goals 1 to 7 set out in the Annex to United Nations General Assembly document A/56/326 dated 6th September 2001, entitled “Road map towards the implementation of the United Nations Millennium Declaration: Report of the Secretary General”, as those Goals may be amended or modified from time to time,
(b)“untied aid” means aid which falls within subsection (3).
Aid falls within this subsection if—
(a)it is either not subject to a condition restricting the states from which goods or services may be purchased using the aid, or (if it is subject to such a condition) the states from which goods or services may be purchased using the aid include all the member states of the Organisation for Economic Co-operation and Development and substantially all states which receive aid from any source, and
(b)the provider of the aid has, so far as reasonably practicable, secured that there will be no significant impediment in the purchasing process which would have the effect of a narrower restriction than that mentioned in paragraph (a) on the states from which goods or services will be purchased using the aid.’.—[Mr. Tom Clarke.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 6 - Policy coherence and Millennium Development Goal 8

‘(1) The Secretary of State shall include in each annual report such general or specific observations as he thinks appropriate on the effects of policies and programmes pursued by Government departments on—
(a)the promotion of sustainable development in countries outside the United Kingdom,
(b)the reduction of poverty in such countries.
(2)Such observations are to include observations on the pursuit of Millennium Development Goal 8, including in particular progress towards—
(a)the development of an open trading system that is rule-based and non-discriminatory and expands trading opportunities for low income countries,
(b)the development of an open financial system that is rule-based and non-discriminatory,
(c)the enhancement of debt relief for low income countries.
(3)In this section, “Millennium Development Goal 8” means Goal 8 set out in the Annex to the document mentioned in section (Aid effectiveness and Millennium Development Goals 1 to 7)(2)(a), as that goal may be amended or modified from time to time.’.—[Mr. Tom Clarke.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 1 - Statistics to be reported

‘Each annual report must include the information set out in the Schedule to this Act.’.—[Mr. Thomas.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 2 - Transparency

‘(1) The Secretary of State shall include in each annual report such observations as he thinks appropriate about the contribution by Government departments to the promotion of transparency in—
(a)the provision of aid, and
(b)the use made of aid provided.
(2)He shall include, in particular, observations about progress in relation to the following—
(a)specifying future allocations of aid,
(b)securing that aid supports clearly identified development objectives, agreed between those providing and those receiving the aid,
(c)promoting the better management of aid, including the prevention of corruption in relation to it,
(d)securing improvements in monitoring the use of aid.’.—[Mr. Thomas.]

Brought up, read the First and Second time, and added to the Bill.

New Clause 3 - Interpretation, and meaning of terms used in annual report

‘(1) In this Act, references (however expressed) to the provision of aid by the United Kingdom are to the provision of aid by Government departments.
(2)If an annual report uses terms which have a special meaning, it must include an explanation or a definition of those terms.
(3)In particular, each annual report must include an explanation or definition of the following terms—

Brought up, read the First and Second time, and added to the Bill.

New Schedule 1 - ‘INFORMATION TO BE INCLUDED IN ANNUAL REPORT

1An annual report must include the following information for the most recent relevant period, and for each of the four relevant periods immediately before the most recent one—
(a)the amount of bilateral aid provided by the United Kingdom,
(b)the amount of multilateral aid provided by the United Kingdom,
(c)the amount of debt relief included in each of the amounts mentioned in sub-paragraphs (a) and (b),
(d)the amount of cancelled export credits included in the amount mentioned in sub-paragraph (c),
(e)the amount of bilateral official development assistance provided by the United Kingdom,
(f)the amount of multilateral official development assistance provided by the United Kingdom,
(g)the amount of the United Kingdom’s imputed share of the aggregate amount of multilateral official development assistance provided by the bodies to which the United Kingdom contributed such assistance,
(h)the total of the amounts mentioned in sub-paragraphs (e) and (f), and that total as a percentage of the gross national income of the United Kingdom,
(i)what percentage of the amount mentioned in sub-paragraph (a) was provided to low income countries, and how much that amounted to.
2(1)The amount mentioned in paragraph 1(a) for each relevant period is also to be broken down—
(a)by region,
(b)by country, and
(c)by sector.
(2)An annual report must also state, in relation to the amount shown for each country pursuant to sub-paragraph (1)(b) of this paragraph, the amount of humanitarian assistance which is included in each full amount.
3The amount mentioned in paragraph 1(b) for each relevant period is also to be broken down at least by reference to aid provided through the following (but may be further broken down)—
(a)the European Community,
(b)the World Bank Group,
(c)the United Nations and its agencies,
(d)other multilateral organisations.
4(1)The amount mentioned in paragraph 1(e) for each relevant period is also to be broken down by country.
(2)An annual report must also state what percentage of the amount mentioned in paragraph 1(e) for each relevant period was provided to low income countries, and how much that amounted to.
5(1)To the extent that it is practicable to do so, the amount mentioned in paragraph 1(g) for each relevant period is also to be broken down by country.
(2)An annual report must also state what percentage of the amount mentioned in paragraph 1(g) for each relevant period was provided to low income countries, and how much that amounted to.
6The amounts included in the annual report for each country pursuant to paragraphs 2(1)(b) and 4(1) are also to be expressed as a percentage of the whole amount mentioned in sub-paragraphs (a) and (e) respectively of paragraph 1.
7Nothing in this Act requires information to be included for any relevant period if the figures for that period are not (or not yet) available when the report is prepared; but if they become available later they must be included in the first annual report which is prepared after they become available.
8Where the annual report includes a figure for the United Kingdom’s imputed share of any amount, the annual report must include an explanation of how that imputed share was determined.’. —[Mr. Thomas.]
Brought up, read the First and Second time, and added to the Bill.

Amendments made: No. 11, in title, line 2, leave out
‘development assistance as a proportion of gross national income’
and insert
‘aid and on the breakdown of such aid’.
No. 12, in title, line 7, leave out
‘expenditure in each country; to make provision’
and insert ‘aid expenditure and’.
No. 13, in title, line 8, leave out ‘development assistance’ and insert ‘aid’.—[Mr. Thomas.]

Gareth Thomas: On a point of order, Mr. Hood. I seek your guidance. Do we need to seek a Division on whether the long title as amended should stand part of the Bill?

Jimmy Hood: No.

Tony Baldry: Further to that point of order, Mr. Hood. In fact, it might not be a point of order but I should nevertheless like to make it. We have had, on Second Reading and today, a most comprehensive debate. We have pretty well rewritten the Bill. There can be no excuse, on Report, for any hon. Member from any party to try further to amend this Bill, which has been examined exhaustively. I hope that Opposition and Government Members and the Whips will make it clear to everyone that there will be no patience with any Member of Parliament who seeks to filibuster on Report and Third Reading. I hope that that will be noted.

Jimmy Hood: The hon. Gentleman is absolutely right: that was not a point of order.

Question proposed, That the Chairman do report the Bill, as amended, to the House.

Tom Clarke: Mr. Hood, I seek a little more success in raising a point of order.
I should like to say how much I agree with the hon. Member for Banbury.We have come to the end of what has been a most impressive sitting that could be a model for many other Bills. However, that did not simply happen this morning, although I am grateful for everything that took place today. I should like to thank a number of people who have made a substantial contribution to our progress thus far.
I thank the staff of the various Departments involved, particularly DFID, for their outstanding commitment. I thank my limited staff for the work that they have done. I also thank Committee members and other hon. Members for the work that they have done and for their support. The spokespersons for all the political parties have been constructive in what they had to say and in helping to develop the Bill. I know that they will allow me to thank my hon. and right hon.  Friends, who have been magnificent in their support. I am very grateful for what they are doing and what they will continue to do until the Bill is, we hope, enacted.
We could not have made this progress without the excellent advice of the Clerks, who are sometimes stern but prove, in the end, to be correct. I know that they, too, would want to join me in thanking Dr. Egan for his excellent contribution in recent months.
I also thank two colleagues who have been helpful and constructive, particularly in today’s proceedings. I referred earlier to the generosity of my hon. Friend the Minister, which whom I was discussing these matters even on Sunday. He was right to reflect in his contribution that although we had not always reached agreement, we managed in the end to get to where we are. I was pleased that our discussion on Sunday took place before the famous rugby match, so he was not aware of the frequency with which red cards were delivered to Scotland. I am grateful for the progress that was made and genuinely grateful for my hon. Friend’s work on the Bill, among all the other work that he has had to do in the House this week.
Finally, Mr. Hood, our proceedings would not have been possible and would not have gone so smoothly had it not been for your chairmanship. You have shown again the good humour, sensitivity and knowledge of procedure that we have always associated with you. I have already mentioned Judith Hart. It is obvious that the Clydesdale constituency makes an enormous contribution to the work of the House, particularly international development, and you have personified that this morning, Mr. Hood.
I end by saying that we have, without a single vote, made good progress, taking on board the views expressed in the House on Second Reading. We have achieved consensus, which reflects well not just on the Committee, but on Parliament. I hope that the consensus, good will and practical approach to progress on international development will be reflected in our proceedings on Report and Third Reading.

Jimmy Hood: I thank the right hon. Gentleman for his kind words. The word “sensitivity” is not generally used to describe me.

Question put and agreed to

Bill, as amended, to be reported.

Committee rose at nine minutes to Eleven o’clock.